Do you like paying high prices for oil? Well, then you’re in luck. It seems that there is a drastic increase in the price of oil coming soon. US energy policies and imperialist aggression are the two-headed beats responsible for this new round of price increases. Already Brent crude futures are trading around $78.10 (from Wednesday). So get ready to shell out even more money for gasoline.
This is taking place for a variety of reasons. The price right now is due to reports of tightening US fuel inventories. The American Petroleum Institute (API) said US crude inventories had fallen by 4.5 million barrels to 416.9 million barrels in the week to June 29. It seems that most of what is around in storage is being used up. This reduction in inventories has been a part of why the price has increased.
However, we are looking at a possible large increase in the near future as well. Tomorrow new tariffs will be going into effect against China. China has promised a tit-for-tat retaliation. They include a $34 billion on US goods. They also threaten to place tariffs on US oil into the country. This will no doubt have a serious effect on the price.
At the same time, the US is threatening to take Iranian and Venezuelan oil completely off the market. While Venezuela has simply denounced the move, Iran is threatening retaliation. Their threat is to block off the Strait of Hormuz to oil shipments. As it is, 30% of all oil which travels by water passes through the strategic strait.
Such a move could be a catalyst for war. Since the US unilaterally withdrew from the Joint Comprehensive Plan of Action agreement (JPCOA) they’ve been on a crusade to sabotage the Iranian economy in an effort to stimulate “regime change”. Continuous aggression against Iran has exacerbated this situation a great deal.
Now, President Trump has claimed he is taking care of the situation by asking Saudi Arabia to increase production by 2 million barrels per day. Beat Wittmann, a partner at financial consultancy Porta Advisors essentially said that this is not a reasonable action. “You cannot order 2 million barrels like ordering a coffee somewhere,” as quoted by CNBC.
PVM Oil Associates strategist Tamas Varga gave a warning about how bad the oil situation could get by the end of the year. “We are entering the second half of the year with a huge amount of uncertainty surrounding the supply side of the equation.”
We’re all familiar how oil is linked to wars in the age of imperialism. If anything could trigger off another war, possibly a world war, oil just ought to do it. While the threat of a world war isn’t all that great, a smaller war, possibly a proxy war – something akin to what was done to Libya and Syria is possible. There’s no telling how far hostilities between the US and China may go. When the giants start stomping around, the little guys tend to get stepped on.
The infuriating aspect of this is the fact that none of this needs to happen. This whole recent situation is the fault of President Trump. It’s wholly unnecessary to threaten Venezuela and Iran. The tariffs against China are wholly unnecessary. None of this needs to be happening. It is only because Trump wants to accelerate the growth of the US empire as it is in decline. A more strategically minded leader would not have resorted to such nonsense.
How bad this whole situation gets is up to Trump, and the people handling him.